Where’s IBM server business going now? It’s anyone’s guess

The latest entrant in the IBM(s ibm) server sweepstakes is apparently Fujitsu. The Wall Street Journal reported Wednesday that the Japanese IT giant is eyeing IBM’s underperforming X86 business (registration required). This comes days after reports positing that IBM is pitching that business to Dell and/or Lenovo.

All of this was an unspoken subtext of IBM’s fourth-quarter earnings call Tuesday when CFO Martin Schroeter acknowledged that hardware remains a problem for IBM, which sold off its PC-and-laptop business to Lenovo a decade ago.

“Hardware continued to impact our overall performance. We are dealing with some challenges in our hardware business model specific to power, storage and X86. As expected, in System z, we are impacted by the product cycle as we wrap on very strong performance a year ago. Together, these dynamics significantly impacted our revenue growth and profit. In fact, our hardware segment profit was down over $750 million in the quarter and $1.7 billion for the year.”


He noted that sales of Power servers fell 31 percent year over year but did not break out specifics on X86 sales or revenue. SeekingAlpha has the full transcript. Overall, the company’s systems and technology (aka hardware) sales fell 27 percent in a quarter where it had hoped to show stabilization.

Cloud computing was painted as a bright spot. IBM claimed $4.4 billion in “cloud solutions” revenue for the year, up 69 percent year over year, although as we know what gets defined as cloud revenue is nebulous. Last week, IBM said would spend $1.2 billion to build out 15 new data centers worldwide to support its Softlayer-centered cloud strategy, which includes taking on Amazon(s amzn) Web Services, as well as traditional IT rivals like HP(s hpq) and Microsoft(s msft).

IBM has disappointed Wall Street now for several consecutive quarters as CEO Ginni Rometty tries to refocus the business around more profitable cloud and services businesses. Rometty, who took on the CEO job two years ago, is foregoing her bonus for the year.